Single-Stock Futures

Single Stock Futures are derivatives instruments that give investors exposure to price movements on the underlying share. A futures contract is a legally binding agreement that gives the investor the ability to buy or sell an underlying listed share at a fixed price on a future date. SSF’s can be easily accessed via JSE equity derivatives members. Contracts are predominantly physically settled however cash settles versions are also available.

What is the difference between a standard futures contract and a dividend neutral futures contract?

Some of our single-stock futures products are available in both standard and dividend neutral form.

Traditionally futures take out the implied dividends of the underlying over the life of the contract. For example, if we agree to trade the share at some future date, we would take all the expected dividends over that period out of the future price since we would not receive these when trading the share on that future date. Undeclared dividends are based on dividend assumptions which may prove to be incorrect. To remove this dividend risk the JSE has created dividend neutral single-stock futures which removes this assumption risk. For more information on these contracts, please see the section on Dividend Derivatives

Who is this for?

SSFs offer investors the opportunity to enhance the performance of their equity portfolios, protect their investments against adverse price movements and cheaply diversify risk. Speculators hoping to make a profit on short term movements in the futures contract price, asset managers, hedge fund managers, arbitrageurs and retail investors seeking portfolio diversification and hedging opportunities in particular should consider this product. Market participants can go long or short as they see fit.

How to get it

To trade, register as a client with an authorised JSE Equity Derivatives member

 

 

 

 

 

 

Options on Single Stock Futures OverviewOptions on Single Stock Futures Overviewhttps://www.jse.co.za/content/JSEEducationItems/OptionsOnSingleStockFuturesOverview.pdfpdf
List of ContractsList of Contractshttps://www.jse.co.za/content/JSEContractSpecificationItems/ListOfContracts.xlsxls
SSFs contract specificationsSSFs contract specificationshttps://www.jse.co.za/content/JSEContractSpecificationItems/SSFsContractSpecifications.pdfpdf
SSO contract specificationsSSO contract specificationshttps://www.jse.co.za/content/JSEContractSpecificationItems/SSOContractSpecifications.pdfpdf

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Features

  • Capital efficient way to gain exposure to share movements
  • SSFs are liquid and easily traded
  • Incur lower brokerage fees than actually trading in the underlying shares
  • Investors can take advantage of price movements in the underlying shares
  • Corporate activities are taken into account and independent valuations are calculated by the exchange
  • Physically or cash settled at maturity
  • Provides short selling opportunities to benefit from downward price movements.